Nedbank’s East Africa push gets green light from Kenya

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Nedbank Group’s proposed acquisition of a controlling stake in Kenyan lender NCBA has moved closer to completion after receiving approval from the Central Bank of Kenya, removing another hurdle in the South African bank’s push into East Africa.The approval brings Nedbank closer to completing the R13.9bn transaction, under which it plans to acquire a 66% stake in NCBA. The deal is a big bet on the region’s growth prospects as Nedbank seeks to reduce its reliance on its home market.Nedbank said on Monday that most of the regulatory approvals required for the transaction had now been secured. The remaining approvals are expected towards the end of the third quarter, after which the bank will be able to move towards settlement, subject to the outstanding conditions being met or waived.“The Central Bank of Kenya welcomed the transaction, saying it would ensure continued stability, enhance the resilience of the Kenyan banking sector and promote competition,” Nedbank said in a statement. The bank has already secured commitments from NCBA shareholders holding about 77.54% of the Kenyan lender.Read: Nedbank woos the wealthy with better bankingThe transaction gives Nedbank exposure to NCBA’s operations in Kenya, Tanzania, Uganda and Rwanda, as well as its digital operations in Ghana and Ivory Coast. Kenya, the region’s largest economy, is expected to serve as the centre of Nedbank’s broader East African expansion.The deal comes as South Africa’s big banks increasingly look beyond the domestic market for growth. Nedbank remains more heavily exposed to South Africa than some of its peers, making the expansion an important part of its efforts to diversify its earnings base.NCBA will retain its listing on the Nairobi Securities Exchange, with 34% of its shares remaining publicly traded, the group said.The transaction is part of Nedbank’s broader strategy to expand its Southern and East African footprint, with management positioning Kenya as a gateway into one of the continent’s faster-growing regions.Business Day